Wednesday 13th July 2022
(2 years, 5 months ago)
Grand CommitteeProcurement Act 2023 View all Procurement Act 2023 Debates Read Hansard Text Amendment Paper: HL Bill 4-IV Fourth marshalled list for Grand Committee - (11 Jul 2022)
Baroness Hayman of Ullock (Lab)
Oh, the noble Baroness is there; I was looking for her in the place in which she sat on Monday. She moved, just to confuse me. This is the trouble with picking things up later.
The noble Baroness rightly said that meeting net zero is a government-stated objective and we believe, as she does, that this should also be an objective within the Procurement Bill. It could make a genuine difference, should that be something that needs to be taken account of. We also support those noble Lords who said in the debate that this helps to meet the levelling-up agenda as well as achieving net zero.
We know that social value is included in the NPPS—the national procurement policy statement—so I ask the Minister: if it is in the policy statement, why is it not referenced in the Bill? It concerns me that the policy statement can be changed at any point, so not having it in the Bill and just having it in the statement means that it is not absolutely embedded within the legislation. I will briefly mention that, between 2012 and 2020, there was no statutory guidance on social value. This inhibits its development, so we need to ensure that this does not happen in future.
I express strong support for Amendments 49 and 58 in the name of the noble Baroness, Lady Worthington, which are about climate and environmental matters and the importance of having these based within the Bill. She also said that “public benefit” needs further clarity, so I must ask again: does “public benefit” include environmental outcomes? It would be helpful to have further information on this. The noble Baroness, Lady Parminter, spoke importantly about the fact that using procurement in this way is an opportunity to drive behaviour change, because we are not going to achieve the Government’s net-zero objectives without behaviour change.
Amendment 45 in the name of the noble Lord, Lord Wallace of Saltaire, specifies a number of overarching requirements that a contracting authority must take due regard of when carrying out procurement. We support the main points that he made—particularly, as well as the carbon account, the ethical and human rights record of the supplier, as he said. I know that we will talk about this in a later debate, but that is important.
Amendment 53 in the name of the noble Lord, Lord Lansley, which the noble Baroness, Lady Noakes, introduced, again talked about defining “public benefit”. I think that the Minister can see that this is not party political: right across the Committee there is concern about what “public benefit” means and what it is going to deliver as part of the Procurement Bill. The noble Lords, Lord Wallace of Saltaire and Lord Purvis, also tabled amendments on this issue.
I finish by briefly mentioning an interesting briefing that I had from UKCloud. I do not know if other noble Lords have received it, but it is about the importance of maximising social value through procurement in the world that UKCloud works in—the cloud providers—and how doing so would be consistent with wider net-zero policy aspirations. UKCloud feels that it is important to support businesses in this country that are providing those kinds of platforms and support and that the sector can lead in the provision of clean, green technologies, which can help to digitise and decarbonise users of its services. It also believes that, if the sector got that kind of support from government, UK businesses would have the opportunity to really innovate and become leaders in this field. I found that an interesting briefing. If the Minister has not seen it, I would be happy to share it with him, because it had some interesting thoughts in it. The briefing also said that UKCloud feels that weighting should be given to make sure that cloud providers for the UK Government are paying their taxes in full on all earned income in the UK—that is an important point—and that they should have a clear and measurable track record of investing in local jobs and skills. The briefing has some interesting points about how procurement could help its particular type of business. I finish there and I look forward to the Minister’s response.
The Minister of State, Cabinet Office (Lord True) (Con)
I thank the noble Baroness and all those who spoke on this group on our previous day in Committee. It was obviously unfortunate that we could not finish this group then, but I am grateful to all noble Lords, including those who were here on Monday who are not able to be here today. It has been an interesting debate and I think that we will wrestle with the philosophy of this as we go forward. I have been interested in the contributions made.
I am constantly asked to define “public benefit”. One of the reasons why we have different political parties in this country and why politics has evolved is that, at different times, different people define it in different ways. The search for a total, accurate, 100% agreed definition that covers every possible eventuality may be an illusion. However, I understand that noble Lords are saying that they feel that there needs to be more clarity. No doubt we will continue this conversation on other amendments to come.
I was interested in this debate. As he knows, I have very considerable affection and enormous respect for the noble Lord, Lord Hunt of Kings Heath—it is very easy to say in this House that you have very considerable affection for somebody, because we are such a nice lot; I think generally we do mean it—and his experience. He said something very interesting. Having argued for his amendment, he said that this Bill would finish with something akin to what he wanted in it and that it would do that because it was a Lords starter.
The only way to interpret that is that the noble Lord would advocate using the power of the House of Lords to force the elected Government to include something in a Bill that they did not wish to include, in their judgment and in the judgment of the House of Commons. That is a perfectly legitimate point of view, but I was interested to see that the noble Baroness from the Labour Front Bench had signed that, as she just reminded us, and expressed her support for what the noble Lord, Lord Hunt, had said. Perhaps I should take this away and tell my friends that if ever there is a Labour Government, it would be reasonable for the unelected House to hold up Labour legislation indefinitely on a Lords starter in order to force change.
Lord Hunt of Kings Heath (Lab)
My Lords, he really cannot get away with that. There are huge numbers of different amendments, which all have the same intention of trying to implement the Government’s policies on climate change and sustainability, which, as the Committee on Climate Change has said, are absolutely fine. The Government’s problem is that they do not have the policies to implement their own strategy. All I am trying to do is to help them implement their strategy. I do not think that that is a great constitutional abrogation by your Lordships’ House. This is a Lords starter, the Government chose to bring it to the House of Lords, the Parliament Act does not apply and it is quite reasonable for this Committee—of course, I cannot speak for my Front Bench; I am speaking entirely as a lowly Back-Bencher—who is seeking to encourage the Government to recognise that they will lose this in this Committee and that the leverage they have to respond is less than it might be.
Lord True (Con)
My Lords, I think that was the noble Lord trying to wriggle off the hook but impaling himself back on it at the end of his remarks. We have to make this House work via the usual channels, and it is reasonable for an elected Government in another place to listen respectfully to the other House, which it should—it is our duty to ask the other House to think again on certain things—but there is a point where we do not say that it should be taken to the wire. However, if I am ever a Back-Bencher and there is something from a Labour Government that I do not like, perhaps I will take away the Hunt dictum—one of the advantages of continuing on Wednesday what you did on Monday is that you can read Hansard, and I read carefully what the noble Lord said—and practise what he preaches. Anyway, let us get on with the business at hand. It is an important issue on which the Front Bench opposite might wish to reflect.
Amendment 45, tabled by the noble Lord, Lord Wallace, and the noble Baroness, Lady Bennett, seeks to ensure that contracting authorities consider a number of additional requirements when carrying out procurements, including reducing net carbon budgets, supplier human rights records, data security in the platform, and transparency. In our view, as I have argued before in Committee, contracting authorities are able to deal with these matters as things stand, and in a way that is more targeted and effective than through inclusion in a broad obligation to “have regard”. In a sense, that is the difference between us. Although the noble Lord, Lord Wallace, said that his were modest demands, and deliberately did not include net zero, for example, that is brought in by the analogous amendment tabled by the noble Baroness, Lady Worthington.
Contracting authorities will be able to take account of suppliers’ carbon-reduction plans and other environmental objectives where they are relevant to the subject matter of the contract. It is unnecessary and potentially unhelpful to contracting authorities to attempt to impose on them all an obligation to have regard to a range of other factors, including net zero—as mentioned in the amendment tabled by the noble Baroness, Lady Worthington—in and throughout all of their procurement activities.
In particular, it places unnecessary burdens on them in relation to areas where this is of limited relevance and would open up smaller contractors unnecessarily to the risk of legal challenge. After all, these matters are also covered in another legislation. Contracting authorities will need—this is in the Bill—to consider the ethical and human rights record of the supplier, in some respects, when considering whether a supplier is eligible to participate in the procurement. We will discuss this issue later. The Bill contains effective provision on the exclusion and debarment of those who do not.
Baroness Thornton (Lab)
Can the Minister please explain why the term social value is not in the Bill?
Lord True (Con)
My Lords, as I have just said, we believe that the additional objective of maximising social value would be a duplicate, as it is embraced in “public benefit”.
Baroness Thornton (Lab)
I am sorry, but the Minister has said that there is no definition of public benefit, and that is quite right. However, there is a legal definition of social value. It exists and is on the statute book, so why are the Government not using “social value” in the Bill?
Lord True (Con)
My Lords, again, I have set out the argument. The noble Baroness disagrees but I am not going to repeat a third time the reason why we think maximising social value is unnecessary and would be a duplicative addition. Each procurement is different and what is appropriate, for example, for a large-scale infrastructure project is not for smaller transactional procurements.
Furthermore, procurement policy should be aligned with wider government policy and, as such, the publication of a national procurement policy statement is based on the strategic policy priorities relevant at the time. It would not be appropriate, in our submission, to include in the Bill priorities which can and probably will change —we have heard that they will—based on an Administration’s objectives. It is always important that policy priorities are included in individual procurements only where they are relevant to the subject of the contract.
On Monday, for example, noble Lords on all sides gave those of us on the Front Bench, I freely confess, a hard time in discussing the importance of minimising bureaucracy to facilitate SME participation in procurement. I took that away as a powerful call, which I have said we will discuss. As I think I have already indicated outside the Chamber, the Government are keen to meet and consider these points.
The paradox is that seeking to include extraneous requirements, which this and other amendments in the group risk, could make it harder for small businesses to bid for public contracts. One cannot talk the small business game, which noble Lords did strongly and fairly, while adding compliance requirements that make things harder for small businesses and help larger organisations to corner the market.
We think that Amendments 48 and 52 in the names of the noble Lords, Lord Hunt and Lord Coaker, and the noble Baroness, Lady Hayman, are unnecessary and potentially unhelpful to contracting authorities in attempting to impose on them an obligation to have regard to improving the economic, social, environmental and cultural well-being of the relevant area in and throughout all their procurement activities. In particular, they would place unnecessary burdens on them in relation to areas where this is of limited relevance and, again, open them up unnecessarily to the risk of legal challenge.
I wonder whether we would all agree—in fact, I do not have to wonder; I know that we would not all agree—on what carrying out procurement in a “socially responsible way” means. In a sense, that is implicit in the challenge from the noble Baroness opposite. We all might have rather different understandings of what that requires. Imposing a legal obligation of such potential breadth on contracting authorities is, we submit, exposing contracting authorities to unnecessary risk and complexity. Contracting authorities will be able to take account of measures that improve the economic, social and environmental well-being of the relevant area—this may differ from local authority to local authority, for example—where it is relevant to the subject matter of the contract. The Bill already allows this, which is absolutely in line with the Government’s levelling-up agenda.
On Amendments 53 and 58 in the names of my noble friend Lord Lansley and the noble Baroness, Lady Worthington, as I said in our debate on an earlier group, the term “public benefit” is deliberately undefined; consequently, it is intended to be a flexible concept that gives contracting authorities a degree of discretion. Again, local authorities may have different views from place to place on what the most urgent benefit in their area is. Although all the proposed economic, environmental and social additions, including creating new businesses, jobs and skills, and reducing geographic disparities in the United Kingdom, might be facets of public benefit in different circumstances—I do not challenge that—we do not believe that it would be helpful to elaborate them in the Bill.
It might also be unfair to small contracting authorities to impose an obligation to consider the reduction of geographic disparities in the United Kingdom; they might be more concerned about disparities up the road. Doing so risks excluding other matters that might be more valid in specific circumstances. The Government consider that contracting authorities are better placed to make that decision in the individual circumstances at hand. We want contracting authorities to think about the extent to which public money spent on their specific contracts can deliver greater benefit than it otherwise would. I think that there is agreement in the Committee on that point. As I have said, each procurement is different; for example, what is appropriate in delivering a giant infrastructure project is not appropriate for smaller procurements.
I turn to Amendments 59 and 59A from the noble Lord, Lord Wallace—
Lord Wallace of Saltaire (LD)
My Lords, I have listened carefully to what the Minister said but I am still puzzled. We are trying to craft a Bill that will have quite a long shelf life over a period when we may have a change of Government or some change in government. The Minister is saying that the catch-all public benefit is the only thing that we should have in the Bill in terms of principles and objectives. I would have thought that the consensus across all our democratic parties on public benefit and social value is a little wider than that and that it would help to provide guidance if that were spelled out rather more in the Bill. Otherwise, the principles and objectives will simply swing from one side to the other when different Governments come.
Everything cannot be left to each changing Minister to define. Surely the concept of public benefit is one that we share, as is the concept of social value. We also share the view that £300 billion-worth of public procurement sets a culture, the core of which I hope that all Conservatives, Labour, Liberal Democrats and Greens share, because that is what we are attempting to get. The Minister is saying that we cannot agree on that. I am aware of some people—the Chicago school of economists and those who follow them—who deny the concept of public benefit altogether and believe that private benefit is the only thing that drives the economy, prosperity and society. I hope that we are not there and are not starting from there.
Lord True (Con)
The noble Lord always slightly loses me when he rides off in his speeches. I have a vision of him lying awake, trying to get to sleep, thinking of these terrible right-wing Conservatives whom he always cites and seeing the worst in everything. I thought that the great tradition of the Liberal party and liberal values, which I was brought up with and adhere to, is to give space to variety and not uniformity; there should be flexibility, with opportunities for local judgments and for contracting authorities to make them. The concept of public benefit is wide and flexible and should be so to give contracting authorities a degree of discretion to consider whether their specific contracts can deliver greater benefits than they otherwise would.
For example, contracting authorities are already able to make it clear in their technical specifications that fair trade options can be included in the products provided to meet the requirements of the contracts, provided that they do not discriminate against other products of other suppliers. The noble Lord objected to the mention of the terrible word “money”, but public procurement needs to have a focus on achieving value for money. The two things are not contradistinctions.
While I would expect contracting authorities to consider these matters where appropriate, it would not be helpful to elaborate them in the Bill, for the reasons that the Government have submitted, as they would not apply to all contracts. The course that the other side is proposing will lead to a uniformity imposed on a diversity, which is the antithesis of local values. I respectfully request that these amendments be withdrawn.
Baroness Hayman of Ullock (Lab)
Just before the Minister sits down, I really do not think that that is what we are trying to achieve. It is just to try to bring in a definition of something. If you have an objective laid out, without proper understanding of what the phrase is trying to achieve or what it means, it could be quite confusing. All we are trying to get is some clarity on what is meant by “public benefit” and what the Government are trying to achieve by having it as an objective. I have no problem with there being flexibility around this—that is important in procurement—but, as the noble Lord, Lord Wallace, said, we need some sort of guidance. If the Government do not want to put a definition in the Bill, some guidance underpinning it, on what this is looking at and what the Government are trying to achieve, would be extremely helpful.
Lord True (Con)
My Lords, in a sense, it depends where the straitjacket applies and where flexibility is enabled. We will come on shortly to debate the national procurement policy strategy and I gleefully anticipate that that will be another zone of contention in our Committee, to which many of your Lordships will want to add more and more things. The noble Lord, Lord Coaker, was enthusiastic about the national procurement strategy at the opening of our proceedings and it is something that an incoming Government would be able to change and mould. Maximising public benefit is an important objective of the Bill.
Lord Scriven (LD)
I have listened very carefully and have just reread every amendment in this group. Can the Minister point to one amendment that prescribes how the principles in each amendment have to be enacted by each local authority or each purchasing authority? They are broad principles which allow the flexibility that the Minister has just described or relate to issues such as social value, which is already in Clause 11. The amendments are exactly the same regarding social value, the environment and social aspects. Where does the Bill say what that means and where does it not allow discretion?
Lord True (Con)
A considerable number of amendments mandate that contracting authorities must have regard to certain items. Others add to the objectives in Clause 11. It is a difference of interpretation. The Government are in one place. On reflection, I think that perhaps people outside government circles will think that that is not as unwise as it now seems. I again respectfully suggest that the amendment be withdrawn.
Lord True (Con)
I agree with the noble Lord, Lord Coaker. This has been an extremely interesting and thought-provoking debate, and I thank noble Lords for it.
There have been various strands in this debate, one of which is the last one alluded to by the noble Lord. There appears to be a suspicion in some minds about whether this lies in the may/must thing and whether there will be a national procurement policy statement. We have published a draft statement, which I will come back to later in my speech. I will not read any of it out, because the noble Lord, Lord Hunt of Kings Heath, was kind enough to read out some of it—although I do not think that he quoted this specific bit—about
“contributing to the UK Government’s legally-binding target to reduce greenhouse gas emissions to net zero by 2050”.
I know that noble Lords are saying, “Oh well, yes, but, et cetera”—
Lord Davies of Brixton (Lab)
The Minister referred to that document as a “draft statement”. My understanding is that it is a non-statutory document, which is something slightly different. Is it a draft of what we are going to get later this year?
Lord True (Con)
This document was produced at one stage of the process of working towards this procurement legislation to illustrate what the national policy statement might look like. I will come on to the question of consultation because that was a second theme and ask in the debate. It was clear in the speech by the noble Baroness, Lady Parminter, about how Parliament will be involved in the process and the hope that Parliament will be able to influence the process in an effective way. I have heard that call and will reflect on it.
The third strand takes us back to where we were before. Noble Lords are seeking to put in primary legislation constraints on what a procurement strategy might and should contain. Having been taken to task by the noble Lord, Lord Scriven, in the debate on the previous group about being diffident about amendments that say “must have regard to”, all the amendments in this group, bar those that are applying the thing, are “must” amendments. They are a tighter straitjacket on the potential procurement statement than what we had before in terms of what is proposed to go into primary legislation, so I am instinctively less likely to be attracted to them.
For the reasons that we have debated at length—that there is a difference between insight and knowledge, that some people want to tie a lot down in primary legislation and that the Government are arguing for flexibility—we sadly cannot accept any of the amendments in this group. Amendment 60, tabled by my noble friend Lord Lansley—the may/must amendment—would require the Government to publish a national policy procurement strategy. We have shown, in earnest, what we might move towards, and we have drafted Clause 12.
However, any procurement policy should be aligned with wider government objectives and, as such, the publication of an NPPS is a decision based on the strategic policy priorities relevant to the Government at that time. Our feeling is that we should not seek to bind a future Government—that may be of a very different complexion to ours—to publish a specific document. Therefore, we think that changing the drafting of Clause 12 from “may” to “must” and mandating the statement in this manner would not be appropriate. However, I have listened carefully to what has been said, and it goes into the box of satisfying Parliament that it will have an opportunity to have influence because we are a parliamentary democracy, and Parliament should have influence. That is a fundamental faith that I hope is shared by all of us who have the honour of being Members of Parliament.
The noble Lord, Lord Davies, raised a point about statutory versus non-statutory. I believe that I said—but somebody behind me said that perhaps I did not—that it was not necessarily statutory but the paving, if you like, was included in statute. The current NPPS is non-statutory. If I gave the opposite impression, that was not my intention, but obviously we are talking about the future here. It is there to show what a statutory NPPS might look like in the eyes of the Government. I hope that I have clarified that.
Similarly, Amendment 546, tabled by the noble Baronesses, Lady Worthington, Lady Young and Lady Parminter, and my noble friend Lady Verma, provides for Clause 12 to be brought into force immediately upon the Act being passed. Again, this amendment seeks to ensure that, in one sense, the things that people want to happen will happen quickly. I hear strongly what my noble friend says about small businesses and the need to reach out and help innovators and the creatives and, on the other hand, to get an NPPS before the public and into operation.
As my noble friend Lady Verma and others will know, it is currently envisaged that there should be a period of six months after the Act is passed before it comes into force, which will allow for consideration and discussion, and for training and learning about implementation. In that light, there are certain difficulties in the proposal to bring the NPPS in on the very first day. I can assure her that the contracting authorities will be required to have regard to the NPPS and embed it in their own organisations. If it is mandated to be on the day the Act is passed, the process may not work as we currently envisage it, but I have heard what has been said in the Committee about the concerns people have on the process and will take that away to colleagues. At the passing of the Act—the point mandated in this amendment—the new regime would be yet to be fully implemented, and we are allowing this period for familiarisation.
The other strand in the debate, as I have alluded to, goes back to our previous group on setting specified strategic priorities in primary legislation. The range of topics we have heard has been very wide—the Government profoundly agree on many of them—and some were very detailed. I know of the passion of the noble Baroness, Lady Boycott, on food matters and am frankly horrified to hear that Coca-Cola is paying for its product. You would have to pay me to have a tin of Coca-Cola, I can tell you. However, the set of details in the proposal could potentially be quite onerous, and the noble Baroness’s objectives are secured or sought in other legislation and activities. I will come back to this later in my remarks.
The range of amendments in this group shows that there are many different priorities. It is precisely for that reason that we believe the contracting authorities should have a range of flexibility and that some of these matters are potentially better detailed in the NPPS than in primary legislation. But I understand why, through these amendments, noble Lords are trying to express their concern on the matters that they wish to have put in. For example, Amendments 61, 65, 69, 70, 70A and 79, in the names of a number of noble Lords, refer to the climate change proposals and net zero. As I have said, these are in the current non-statutory document. While I recognise the importance of this, it is absolutely correct in our view that public procurement needs to be focused on achieving value for money.
The noble Lord, Lord Hunt, read out parts of the current draft and said that there is a dichotomy and a balance here. Yes, we admit that there is a dichotomy and a balance to be reached but we maintain that it would not be appropriate to include wider policy objectives in primary legislation. Each procurement is different and, as I have said before, what is appropriate for a large one is not necessarily appropriate for a small one. It is always important that policy priorities are included in individual procurements only where they are relevant to the subject of the contract, in our submission. That is to avoid making procurements unduly complex and difficult, particularly for smaller or new entrants and innovators, to comply with.
Lord Wallace of Saltaire (LD)
I have just one more question. It is about periodicity. From the point of view of a contractor, it would be unwelcome to have too frequent changes in the public policy statement or too long periods in which the statement is not revisited. If I were a contractor, I would want to know when a new statement might be coming.
We have a relatively strong convention that strategic reviews of foreign policy and defence take place every two to four years or at the beginning of each Parliament. Would the Minister consider whether there needs to be something in the Bill to prevent new Ministers, when they come into their department, nine months after their predecessor took office, having their statement instead, which would be quite chaotic; or a Minister who had been there for seven years deciding that he did not want to have anything to do with it? Some encouragement for a regular period of ministerial statements might be a positive aspect for the Bill.
Lord True (Con)
As so often, the noble Lord makes an important point. I was charmed by one aspect of his arguments on continuity, when he complained that the Conservative Party kept changing Prime Ministers. I thought he was one of the main cheerleaders for a change in Prime Minister, so he cannot, in the immortal phrase, have his cake and eat it.
There is a duty in the Bill as drafted for a Minister of the Crown to keep the national procurement policy statement under review. It is not in the Bill—noble Lords have not been particularly receptive to the argument I put forward, although the noble Lord, Lord Coaker, has shown his eagerness to get his hands on the levers of power and use them—but the Government’s intention, with great generosity, is that it should be possible for a review of the NPPS to be undertaken in each Parliament. If one made a period of eight years or whatever statutory, then a new or different Government coming in would have to task primary legislation to make that change. That is the kind of structure we have been trying to operate in. Part of the reason the Bill has been framed in the way it has is to leave flexibilities, some of which your Lordships do not like and some of which at least one of your Lordships does.
I turn to Amendment—
Lord Hunt of Kings Heath (Lab)
The Government have put some objectives into legislation, such as the climate change targets. What we are saying is, for goodness’ sake, where that happens, link this Bill to the other pieces of legislation. Surely it all fits together then.
Lord Davies of Brixton (Lab)
On a serious note, I add the example of pension schemes. The Government have laid a series of responsibilities on pension schemes to have regard to matters such as climate targets. The Government have accepted the principle of doing it this way and the Minister seems to be ignoring that.
Lord True (Con)
In the real world, we are dealing with a Bill which relates to contracting authorities. The counterparties to contracting authorities are would-be suppliers. The more one lays a duty on contracting authorities to do something, the more a small business which is seeking to enter the procurement process will have to come forward with pages and pages of compliance documents. Noble Lords may think that is not the case. On a personal note, my wife, who is far greater than me, runs a small business. When she started, the compliance requirements were about an inch thick, but now they are much thicker. The danger is always that, in the desire to do good, one ends up creating barriers to entry.
Baroness Bennett of Manor Castle (GP)
Is it not the case that small and medium-sized enterprises are facing these requirements from other quarters? I am thinking of a meeting I attended of the northern Country Land and Business Association where we heard from the banking sector that no farmer would be able to apply for a loan unless they could show their carbon budget. We have talked about food, as one area. This is going to be the reality of doing business. These will be pre-existing things, so this would simply ensure they are taken into account.
Lord True (Con)
I hear that but I must say this: it is sometimes quite extraordinary to listen to noble Lords. You would not think that it was this Government who amended the Climate Change Act 2008 in 2019 to introduce the target of a reduction of at least 100% in the net UK carbon account by 2050. The other parties had every chance to do that but did absolutely nothing. I am then lectured in this way about the Government not putting in the small print of this particular piece of legislation a target for which, to be fair, this Government legislated and, frankly, this Prime Minister pushed strongly. Procurement Policy Note 06/21 already sets out how to take account of suppliers’ net-zero carbon reduction plans in the procurement of major government contracts. Included as a selection criterion is a requirement for bidding suppliers to provide a carbon reduction confirming their commitment to achieving net zero in the UK by 2050. It is there in that procurement policy note.
Amendment 71 tabled by the noble Lord, Lord Aberdare, would require contracting authorities to have regard to the NPPS in respect of contracts awarded from the framework and/or a dynamic market on every occasion. The NPPS applies to both the setting up of a dynamic market and the awarding of a framework agreement. Contracting authorities will therefore need to apply it when establishing conditions of membership that suppliers need to satisfy in order to participate in a dynamic market; when undertaking a competitive tendering procedure to award a framework; and in setting the contract terms and conditions that apply to the framework. We believe that this is sufficient for the purposes of ensuring that the policy priorities are fully reflected in government contracts, but I will look carefully at the noble Lord’s remarks.
Lord Aberdare (CB)
I thank the Minister for that answer and for getting to it at the third time of asking, by which point I was almost bursting with excitement as to what he was going to say. I am not entirely clear why the Bill seems to take frameworks and dynamic markets out altogether but I will study what the Minister has said and endeavour to understand. I thank him for getting there in the end.
Lord True (Con)
Well, I did try to get there but I had an intervention, then another intervention. It would be discourteous not to respond to—or be provoked by, as some may feel—the odd intervention. Is that not the give and take of debate, which is what our blessed Parliament is all about? If I have given the noble Lord incorrect advice, I will correct it, but what I have read out is the legal advice that I have been given.
Amendment 78A tabled by the noble Lord, Lord Wigley, provides that a Minister of the Crown may not introduce a Bill in either House of Parliament to amend or omit Clause 13, which relates to the Wales procurement policy statement, unless, as the noble Lord explained, Senedd Cymru has resolved by a majority of those present in voting to approve it. This is an uncongenial part for the noble Lord: the effect of this amendment would be to fetter the power of this and any future Parliament. The Government therefore cannot accept this amendment. However, as I mentioned earlier—he was kind enough to allude to this—we respect the devolution settlement and the competence of Wales on this matter. I have placed that and the degree of co-operation we have with the Welsh Government on the record in Hansard. That due respect for the devolution settlement is something that the Government aspire to see continue in this case, but we cannot accept the lock that he requests in the amendment.
Lord Wigley (PC)
I am grateful for and accept the integrity with which the Minister is putting that forward and the spirit in which he stated the difficulty that there would be with my amendment. None the less, he will be well aware that there are other forms of amendments that could be put forward, possibly on Report, to ensure that there is the necessary consultation and discussion before any changes in legislation take place. That form of words has appeared in other legislation. Could I invite him to consider that between now and Report? I think that that would be a good indication for those in Cardiff.
Lord True (Con)
My Lords, obviously my right honourable friend will consider everything in his engagement with the Welsh Government. If the noble Lord wishes to bring forward an amendment, I will also consider and respond to it. By the way, I was not waving at my officials or my absolutely brilliant colleague; one of those wretched moths was just about to fly into my ear and prevent me hearing the noble Lord’s charming and persuasive words.
Further amendments cover compliance, reporting requirements and review. I know that this is an area that the Committee is interested in and will probe as the Bill goes forward. Amendment 75, tabled by the noble Lord, Lord Wallace, provides for a compliance review within three years, with a particular focus on small businesses and social enterprises. I fully understand the importance of social enterprise. The noble Lord is not in his place any more but I myself created social enterprises when I was the leader of a local authority; I think that their contribution to our national life is immense.
I assure noble Lords that the Government are committed to breaking down barriers for small businesses and new entrants in supply chains. We had a good debate on that on Monday; my noble friend, among others, made very strong points. Our position is that, although we agree that compliance in this respect is important, it would not be appropriate to legislate and place additional burdens on contracting authorities for this. Small businesses and other suppliers will continue to have access to the Public Procurement Review Service, which will form part of the procurement review unit, to raise any concerns that they have in respect of contracting authorities’ compliance with the Bill, including the duty to have regard to the NPPS. The Bill also provides the Minister with the power to investigate these cases. I am sure that this will provide small businesses with good recourse to challenge non-compliance with the NPPS but we have undertaken to give further consideration to and engagement on the interests of that group in relation to small businesses; I will add the noble Lord’s suggestion to that engagement.
Finally, we return to the question of social value, which was addressed in the previous group. Amendment 75A would require the Secretary of State to provide guidance to contracting authorities on how to implement social value in line with the NPPS. Again, the noble Lord, Lord Hunt, was kind enough to read out the current draft document, where social value is fully represented. As I argued in the debate on the previous group, we believe that this amendment is not necessary. The Government and the Government for Wales will publish procurement policy statements containing their priorities, which all contracting authorities must have regard to when carrying out a procurement or exercising functions related to it. As these priorities may change from one NPPS to another, we do not believe that it would be appropriate to specify on the face of the Bill that guidance on a given issue must always be produced.
Amendment 80, tabled by the noble Baronesses, Lady Hayman of Ullock and Lady Bennett, and the noble Lord, Lord Coaker, concerns the inclusion of a new clause for requiring carbon reduction plans from suppliers for contracts above £5 million. I have already referred to a procurement note but, as I have mentioned, we do not see this type of criterion being suitable for inclusion in the Bill. While central government has policies for this on complex procurements, the amendment would be a burdensome addition to the workloads of contracting authorities across the UK and could potentially inhibit new entrants.
Lord Coaker (Lab)
Excuse me for interrupting the Minister but I do not understand what he just said. Amendment 80 would make mandatory what the Government have already said procurement is required to do. Procurement Policy Note 06/21, which the Government have published on their website, is titled:
“Taking account of Carbon Reduction Plans in the procurement of major government contracts”.
All the amendment does is clarify the legal status of 06/21, which is the Government’s own policy. Given the line the Minister has taken, I would be parading 06/21 as a good example of what the Government are doing. That is all this amendment seeks to change in the Procurement Bill. The Minister may need a note on this—I appreciate that—but that was the purpose of this amendment. I wonder whether the Minister could clarify what he has just said in reference to Procurement Policy Note 06/21, which we have included in the explanatory statement as the purpose of Amendment 80.
Lord True (Con)
I deliberately referred to Procurement Policy Note 06/21. It is something that the Government have done; however, the line I am taking and the position of the Government is that we do not wish to encrust the Bill with statutory requirements. I am glad that the noble Lord opposite follows the policy—I reminded him of it as I was going through my speech—but, if I yield one, I will yield 125. It was kind of the noble Lord to say that he was pleased that the Government published Procurement Policy Note 06/21 but I wish he would be satisfied.
I recognise that Amendment 80 replicates the £5-million threshold but we think that taking this policy forward would potentially be a burdensome addition for SMEs, which are required to produce and maintain such documents—not only if they are small SMEs but if they want to be part of a consortium for a larger government procurement project. Despite what the noble Lord said, I do not believe that this changes the overall position of the Government that we should not add to the Bill, to primary legislation, the encrustations that he requests.
Lord Coaker (Lab)
I am sorry to pursue this. Procurement Policy Note 06/21 helpfully has some frequently asked questions at the end. One asks when it should be applied. It says that the note
“applies to all Central Government Departments”.
What does that mean? Does it apply or not? Is the Minister saying that it applies to them but the Government do not really mean it and departments can choose whether to do it? What is its status? Is it worth the Government putting in their own documents that it
“applies to all Central Government Departments”?
They might as well just say, “Do it if you want”. What is the purpose of publishing it if it is very loose and can apply only if the departments want? I do not know.
Lord True (Con)
That is the point. Currently, 06/21 refers to “Central Government”, as the noble Lord said, but his amendment applies to “all contracting authorities”, as I read it. If that is not the case, I will stand corrected and we will write a letter to explain that it applies to everybody, as he proposes. I am advised that his amendment goes further than the current procurement arrangements but, if that is incorrect, I will write a note.
Lord Coaker (Lab)
I thank the Minister for that. It is helpful. If I get a letter back saying that the amendment goes further than 06/21, with that information, I can change the amendment before Report or be satisfied and not need to. It would be very helpful of the Minister to clarify that in a letter; I wonder whether he might think of sharing that with other Members of the Committee.
Lord True (Con)
Yes, I hope that letters that are sent out are shared with other Members of the Committee and, if not, I will make sure that they are. I would not want to encourage the noble Lord too much in the hope, because the Government’s position is that we do not think it is advantageous to encrust the primary legislation with the range of aspirations that we have heard from many sides in this Committee. The noble Lord can have another try, but I cannot promise that it will be different. But I will write to him and circulate the letter anyway.
I respectfully request that these amendments be withdrawn or not moved.
Baroness Noakes (Con)
My Lords, we have had a very wide-ranging, and rather long, debate on this group of amendments. I will start with my noble friend Lord Lansley’s Amendment 61, on the list of strategic priorities. As I predicted, the Minister heard various lists of different kinds of things that noble Lords wanted in the Bill. Let me say that I was wholly convinced by my noble friend’s explanation of why they should be encrusted—as he put it—in the Bill, but I suspect that I am not representative of the Committee in that regard.
In respect of Amendments 63 and 64, my noble friend helpfully said that the Government would share the draft of a national policy statement as part of the consultation process, which I think clarifies that aspect.
I turn to the lead amendment in this group, Amendment 60—the may/must amendment. My noble friend the Minister argued for flexibility for the longer term; other Governments may not want to issue such statements, and I completely accept that. What I did not hear from my noble friend was that this Government commit to publishing a statement under this clause. I would have hoped that, at least from the Dispatch Box, the Minister would commit to publishing the statement, having included Clause 12 in the Bill. He talked about the timetable for the introduction of the Bill and the six months of learning process, but I did not hear what happens to the policy statement. I hope that he might reflect and perhaps give clarity on that in writing or at a later stage.
With that, I beg leave to withdraw.
Lord True (Con)
My Lords, the Government have the lead amendment in this group, and I look forward to hearing the comments of fellow members of the Committee. Although there is a large number of government amendments in this group, most of them are consequential, so there are actually seven points in the government amendments, which I will express as briefly as I can.
Amendment 83 to Clause 15 is a consequence of Amendment 93. It clarifies in Clause 18 that the authority’s requirements and award criteria are two separate concepts. The amendments make it clear that, to be awarded a contract, the supplier’s tender must satisfy the contracting authority’s requirements and be the most advantageous in terms of award criteria.
Amendment 94 to Clause 18 is technically a consequence of Amendment 126. Amendment 126 amends Clause 22 to make it clear that the contracting authority may set a number of award criteria against which it will evaluate tenders or may set only one criterion. That has led to consequential Amendment 113 to Clause 19.
Amendments 111 and 114 clarify the drafting to confirm that Clause 19(6) is talking about exclusion by reference to intermediate assessment of tenders in Clause 19(5)(b) and that the timing of assessment may vary.
Amendment 134 confirms that Clause 24 applies to the process to become a member of a dynamic market and a process for the award of a contract under a framework, as well as competitive tendering procedures under Clause 19. This has meant moving the clause to later in the Bill, and it will be under Chapter 6, “General Provision about Award and Procedures”. Amendments 137, 140 and 145A are all consequential.
Amendment 135 simply amends the term “terms of a procurement” to “procurement documents”. I know that noble Lords are rightly concerned about definitions. This is to ensure the clause operates effectively for the award of contracts under frameworks and for applications for membership of a dynamic market. Amendments 136, 138, 139, 142 and 143 are all consequential.
Amendment 145 expands the definition of “procurement documents” in this clause to cover documents used for frameworks and dynamic markets. I beg to move.
The Deputy Speaker (Baroness Newlove) (Con)
My Lords, I now call the noble Baroness, Lady Brinton, to speak remotely.
Lord True (Con)
My Lords, I thank noble Lords for another interesting debate that I have enjoyed listening to. Some thoughtful points have been made. I must say at the outset that Ministers are responsible for many things but we are not responsible for groupings. We just get told what we must do. It would have been quite possible, through the usual channels, to agree to de-group those amendments and put them separately but, as we say, “Them’s the breaks”.
Notwithstanding the illogicality that has been pointed out, I will address what is before us. By the way, I thank the noble Baroness, Lady Hayman of Ullock, for what she said about the official Bill team, who support us all in Committee on the Bill. I fully endorse what she said. Many of them are here to hear it; if they are doing their job, they will probably notice it in Hansard but, none the less, I will make sure that they do.
Amendment 101A, 528A and 528B, tabled by the noble Baroness, Lady Hayman of Ullock, and the noble Lord, Lord Coaker, and Amendment 528C, tabled by the noble Baroness, Lady Brinton, and the noble Lord, Lord Scriven, cover health and procurement, as we just discussed. I candidly acknowledge that, sometimes in life, there are minor frustrations. I know that the Committee is understandably wrestling with the issue. My noble friend Lady Scott—I am sorry, I always call her Jane—tried to answer the question asked by the noble Baroness on two occasions but I will come on to say what we have tried to do about this; indeed, I will now read out the answer that I have been given.
These amendments would significantly extend the rules in Clause 18 by imposing additional requirements on authorities to have regard to a range of health sector-specific issues when awarding contracts for the research, development or supply of health services or health products. As we have already touched on at various points in the debate, contracting authorities need to make procurement decisions on a case-by-case basis. It would not be appropriate to include wider policy objectives, such as those suggested, in primary legislation. This could jeopardise the achievement of value for money and make it harder for small businesses to bid for these health services and health products contracts.
Amendment 528C would override the healthcare procurement regulation-making powers set out in the Health and Care Act and make the Bill apply instead to all healthcare purchasing—the challenge set out by the noble Baroness, Lady Brinton. The position is that the Department of Health and Social Care is currently preparing regulations, following public consultation, which will implement a new provider selection regime specifically designed for the procurement of healthcare services delivered to individual patients and service users. Obviously, noble Lords will have the proper opportunity to scrutinise and debate the implementation of these powers when they are laid in Parliament, through the affirmative procedure.
On the question raised by the noble Lord, Lord Scriven, the recent DHSC consultation on proposals for its new provider selection regime acknowledges the need for integrated procurement for health and social care services. Existing procurement legislation recognises and provides for mixed procurement approaches, and relevant details will be included in the DHSC’s forthcoming regulations and guidance. Parliament will have the opportunity to scrutinise these under the affirmative procedure.
I know that noble Lords have said that they not entirely satisfied with this. It is the situation that clinical services for individual patients are with the health service. My noble friend highlighted—as I said on day three in Committee—that we would write to the noble Baroness, Lady Brinton, on how the interface between the Procurement Bill and the health Act will work in practice, I reassure noble Lords that that is being prepared. We will seek to pick up many of the questions that noble Lords have asked on each day of the debate so far, in this area. That will be put before your Lordships before we get to group 14—I hope it is not group 13—or whenever we get to it. It is being done, but I have heard what noble Lords have said. I can tell the Committee that I am also writing personally to the Secretary of State for Health to seek further clarity on when the regulations will be available for scrutiny. I have heard the requests from your Lordships in this area.
I turn now to Amendment 118 tabled by my noble friend Lord Lansley, whose appearance varies today—I will not hurt him by saying it is improved today. This amendment would modify Clause 20 to require the tender notice to provide a period during which “suppliers may ask questions” and have the answer provided “to all potential suppliers”. Under the Bill regime, there is nothing preventing potential bidders asking for further information or clarification of matters within the tender notice or associated tender notice documents; in fact, this is standard practice in procurement procedures. There is a risk that including a specific provision to this effect might suggest that questions cannot be asked outside that window. We would not want to suggest that there comes a point at which interested suppliers can no longer ask questions of contracting authorities. With that in mind, I hope I have reassured my noble friend—when he comes to read this section—that the Bill already allows for the circumstances he wishes to see.
Amendment 119 and others relate to the Prompt Payment Code. Amendment 119 seeks to require being a signatory to the Prompt Payment Code to be used as a condition of participation in the award of a public contract. We are committed to ensuring prompt payment to suppliers. However, requiring that every potential bidder becomes a signatory to the Prompt Payment Code to participate in the procurement would be too onerous a requirement. Therefore, while we encourage suppliers to sign up to a Prompt Payment Code, we do not consider it proportionate for us to legislate for it in this Bill.
Amendment 120, tabled by the noble Lord, Lord Aberdare, would extend the consideration of whether conditions are proportionate for the purposes of subsection (1) to include the accessibility of the contract to as broad a range of suppliers as possible. This is an abiding theme in your Lordships’ Committee. The primary purpose of Clause 21 is to ensure that the suppliers that participate in the procurement are capable of delivering the contract, but also that these conditions are restricted to only those which are needed to deliver the contract.
The noble Lord asked what we are doing to stop unreasonable requirements of SMEs and others, and I include in this broad range social enterprises and charities. As I say, the intention of Clause 21 on conditions of participation is to prohibit disproportionate or unreasonable requirements being put on contracts that would end up excluding SMEs. The authority must be satisfied that conditions of participation consider only the legal and financial capacity and technical ability of the supplier to perform the contract in question, and that there are proportionate means of doing so. We will look carefully at the noble Lord’s words. That is the intention behind Clause 21, but we will bear in mind what he said.
On the previous day of Committee, we discussed the importance of creating opportunity for SMEs and others. There was a broad ask from your Lordships. We think the clause as drafted helps with that, as conditions are pared back to focus on delivery. I have already committed to holding an engagement during the Recess about what more we can do to support SMEs. In the meantime, we consider that this amendment is not required, but we will give it some reflection. Is “reflection” a parliamentary word? It sounds like a word that one of the right reverend Prelates might use.
Lord Davies of Brixton (Lab)
Will the Minister make it clear: when he says SMEs, does that embrace small charities and voluntary organisations, which I know are anxious about their situation under the process?
Lord True (Con)
Yes, my Lords, I believe I did say that. In parliamentary terms, I am reiterating what I said. SMEs cover, for the purpose of this, voluntary organisations, social enterprises and charities. I think I have made clear my profound personal belief that these are part of the vital warp and woof of our society.
Amendment 121, proposed by noble Lord, Lord Wallace of Saltaire, aims to ensure contracting authorities take reasonable steps to verify that the supplier and any subcontractors are able to deliver the contract. Although we absolutely agree that contracting authorities need to do this in practice, we do not think it is necessary to add this provision into legislation, as the very operation of procurement is geared to this—the setting of conditions of participation, award criteria and evaluation processes, to name a few. While, as part of the Bill, we are improving supply chain visibility, we do not want to overengineer—noble Lords must have heard me say this too many times—legislative requirements for contracting authorities to investigate these matters in every procurement process as a box-ticking exercise.
Amendment 122A, which was proposed by the noble Baronesses, Lady Thornton and Lady Bennett of Manor Castle, and supported by others, would give the Minister the ability to exempt contracting authorities from the tests that must be satisfied when setting award criteria in order to allow policy priorities to take precedence to create additional public value. The Delegated Powers and Regulatory Reform Committee might have something to say about such an amendment if it were put forward by a Minister. It sounds very much as if certain rules need not apply in this particular place or contract. It certainly has a whiff of the dispensing power that the Glorious Revolution was designed to do away with, although I know noble Lords will say there is too much Henry VIII in too much legislation. So, in a technical sense it would be a difficult thing to do, but we think it would be undesirable.
We want all award criteria to be clear, measurable, relevant, non-discriminatory and proportionate to avoid unnecessary burdens on suppliers. We believe that this, together with our plans to publish a national procurement policy statement, which we debated earlier, and the requirement for authorities to maximise public benefit, will be sufficient. I have heard scepticism, but we believe that is the case.
Baroness Worthington (CB)
Sorry to interrupt, but just to clarify, it seems to me that the reference to “maximising public benefit” in the Bill is completely and utterly superfluous and has no meaning. The Minister’s response has further confirmed that the only criteria that can really be taken into account are value for money and cost. We will need to return to this at Report, because it now seems very clear that this is not an accident or some kind of desire for flexibility; it is really saying that there is only one thing that counts, and that is cost—and in the short term.
Lord True (Con)
I respectfully disagree with the noble Baroness. It is acknowledged from the other side that value for money is an extremely important criterion. It is one of the things in Clause 11. We have discussed mechanisms and we have had discussions about the national procurement policy statement, wherein, in the draft on the table, lie large numbers of things which the noble Baroness is seeking. It is frankly not the case to say that there is nothing in here other than value for money—that is not the Government’s submission to your Lordships. The Bill takes forward the change from the use of the term “most economically advantageous tender”, MEAT, to “most advantageous tender”, MAT. That is to reinforce the precise message that procurers can take a broader view of value for money than simply lowest price. We believe that the amendment tabled by the noble Baroness is not necessary.
Amendment 129A, in the name of the noble Lord, Lord Aberdare, would make it explicit in the Bill that contracting authorities must always include an objective mechanism for determining price or cost after contract award where and to the extent that value for money, but not price or cost, is evaluated when assessing which tender is the most advantageous. We believe that commercial practice and other provisions in the Bill mean that this amendment is unnecessary. It would be highly unusual for contracting authorities not to include an evaluation of price or cost when assessing value for money in their procurements. This is good commercial sense.
Further, contracting authorities are not free to act unbounded. The procurement objectives, including those in Clause 11, will apply. I do not think it is necessary to expressly legislate for it. We will, however, publish guidance to contracting authorities on evaluation. The noble Lord may well ask me when the guidance is to be published. He also asked how we can be sure that that guidance will bite further. It may be that I can come forward with further information after Committee.
I am sorry, I have been given a long speech—
Baroness Noakes (Con)
We would not mind if my noble friend made it shorter.
Lord True (Con)
I would be happy to. There were a lot of amendments. I do not want to break down and not continue, but I have about four more minutes to go. With the Committee’s permission, would my noble friend—
Baroness Scott of Bybrook (Con)
Would my noble friend like me to take over his speech, as he is coughing?
Baroness Scott of Bybrook (Con)
My Lords, Amendment 131, tabled by the noble Lord, Lord Best, would prohibit contracting authorities applying relative assessment methodologies for price, costs or value-for-money award criteria, with the aim of preventing “race to the bottom” behaviour by suppliers and helping contracting authorities achieve safe, quality and value-for-money outcomes.
The objective of the Bill is to make public procurement more flexible for contracting authorities and suppliers, not less. In deciding how to assess tenders, contracting authorities must be able to determine what is important to them and the best means of assessing this. In some cases, price may be more important than others and, in particular, price assessment methodologies may be more appropriate in certain circumstances. I must also stress that contracting authorities will be very aware of the need for safe outcomes and that those cannot be compromised. To reiterate, we will publish guidance on assessment to help contracting authorities decide how best to assess tenders.
Amendment 147, tabled by the noble Lord, Lord Hunt, would require a Minister, within three years of the Bill being enacted, to undertake a review of the impact of the rules on how contracts subject to a competitive procedure must be awarded. In particular, the review must assess the impact of the change from “most economically advantageous tender”, commonly referred to as MEAT, to “most advantageous tender”, commonly referred to as MAT. On the delivery of social value, and whether the needs of service recipients have been met under contracts, the change from MEAT to MAT sends a much clearer message to contract authorities that the contracts do not have to be awarded on the basis of the lowest price. I can assure the noble Lord that the matters he refers to are within the scope of MAT, where they are relevant to the contract being procured.
Amendment 149, tabled by my noble friend Lord Lansley, would make explicit that contracting authorities may exclude a supplier where it has failed to explain satisfactorily why the price or cost proposed in its tender appear to be abnormally low. We discussed this point during a recent SI debate, and I welcome his contribution. I appreciate that tenders may appear abnormally low for a variety of reasons, some of which ought to concern contracting authorities. The Bill’s silence on this point is not intended to discourage authorities seeking to understand the proposed price and cost or interrogating suppliers where they appear to be abnormally low. Authorities are already under an overarching duty to award contracts to the most advantageous tender. This should be sufficient to allow for questions to be asked of suppliers about proposed price and costs, and authorities can structure their evaluation to ensure that tenders can be rejected where the authority has reason to believe a tender is abnormally low.
In summary, this Bill aims to deliver a simpler regulatory framework. It therefore does not include every possible action a contracting authority might wish to take in assessing the validity of tenders or awarding contracts. This approach is better than the existing EU approach, as it offers increased flexibility to design efficient, commercial and market-focused competitions, while reducing burdens for smaller firms. Therefore, I respectfully request that these amendments are not moved.